International Business Machines Corp reported its second-quarter revenue rose 2 percent to $23.7 billion. Analysts on average had expected $24.2 billion, according to Thomson Reuters I/B/E/S. The company's shares fell 3 percent after-hours to $125.60 after closing at $129.79.

Net profit, however, slightly exceeded expectations and rose to $3.4 billion, or $2.61 a share, from $3.1 billion, or $2.32 a share, a year earlier. Wall Street had forecast $2.58 a share.

The company also raised its full-year outlook for earnings per share of at least $11.25 from a previous forecast of at least $11.20.

IBM has been shifting away from commoditized hardware products in the past decade, focusing instead of software and services. It is now the world's biggest IT services provider.